Fitch: Magnitogorsk Iron & Steel view to positive

Fitch Ratings said it revised OJSC Magnitogorsk Iron & Steel Works’ outlook to positive and affirmed its long-term issuer default rating at BB+.

The agency also said it affirmed the company’s long-term local-currency issuer default rating at BB+, short-term local-currency rating at B, national long-term rating at AA(rus) and senior unsecured foreign-currency rating at BB+.

The positive outlook reflects the company’s strong financial performance, which has largely been in line with expectations, Fitch said.

As a result, the company was able to reduce funds-from-operations adjusted gross leverage in 2015 to about 1.3x, mainly through debt repayments, the agency said.

Leverage is expected to remain at this level for the next few years, Fitch said.

The ratings also reflect the company’s strong position on the Russian market as a supplier of a wide range of high value-added steel products, the agency said.

The operating environment in Russia remains challenging for steel producers due to declining demand in end-user sectors such as construction, automotive and machinery for 2016, Fitch said.

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